Paras Mercioniu
Court of Protection
Autumn Statement – 17th November 2022
Today The Chancellor Jeremy Hunt presented the Autumn Statement, announcing the government’s plans to deal with the current economic situation. It is reported that over the next five years there will be £30 billion in spending cuts, plus £24 billion in tax rises.
In summary:
The triple lock will continue to apply to ensure increases in State Pension rates and benefits will also increase in line with inflation in April 2023. The increase will mirror the September 2022 inflation figure of 10.1%.
A cost of living payment to be made to people on means-tested benefits (£900), disability benefits (£150) and pensioners (£300).
The threshold at which the highest tax rate (45%) is paid will be reduce from £150,000 to £125,000.
Rates for Income Tax and National Insurance will be frozen until April 2028, meaning that more will be pulled into higher tax bands as wages increase.
The National Minimum Wage will rise from £9.50 per hour to £10.42 per hour from April 2023 for those aged over 23.
The tax-free dividend allowance will be reduced from £2,000 to £1,000 in April 2023.
The Capital Gains Tax personal allowances is to be cut from next year. It is currently £12,300 and will be reduced to £6,000 from April 2023. The following year it will reduce further to £3,000.
As with the Income Tax rates, the ‘nil rate band’ (below which no Inheritance Tax is payable) will be frozen until April 2028.
Revaluation for Business Rates will go ahead in 2023, but tax cuts will be made over the next five years to prevent increases for businesses.
Government departments will need to find reductions in spending, with an exception for health. However, as the date is set for after the next election in 2024, it is hoped by the Chancellor that the cuts can be avoided if the economy recovers sufficiently.
Stamp Duty changes from September 2022 are to remain in place until 2025, when the provisions will end.
The Energy Price Cap and Energy Support due to end in April 2023 will be replaced by a higher cap (up to £3,000 from the current £2,500) and more limited support aimed at those on the lowest incomes, removing the support currently available irrespective of means.
The windfall tax levied on energy companies will be extended, leading to £45 billion of tax over six years.
Local authorities will be able to increase council tax by up to 5 per cent (currently 2.99%) before a local referendum would be required to approve the increase.
Increases in rent for social housing tenants will be capped at 7%, avoiding the full inflationary increase by 10.1%.